Income Taxes (Notes)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure

The Company's income before income taxes and income tax expense (benefit), each by tax jurisdiction, consists of the following (dollars in thousands):

	Year ended December 31,
	2023		2022		2021
Income before income taxes:
Domestic	$	20,660	$	56,750	$	28,380
Foreign	29,930		30,920		40,730
Total income before income taxes	$	50,590	$	87,670	$	69,110
Current income tax expense:
Federal	$	2,740	$	13,300	$	940
State and local	670		3,470		530
Foreign	8,690		6,170		8,840
Total current income tax expense	12,100		22,940		10,310
Deferred income tax expense (benefit):
Federal	1,800		(1,780)		5,450
State and local	150		50		670
Foreign	(3,820)		290		(4,630)
Total deferred income tax expense (benefit)	(1,870)		(1,440)		1,490
Income tax expense	$	10,230	$	21,500	$	11,800

The components of deferred taxes are as follows (dollars in thousands):

	December 31, 2023		December 31, 2022
Deferred tax assets:
Accounts receivable	$	1,770	$	1,290
Inventories	7,260		5,640
Accrued liabilities and other long-term liabilities	16,780		14,580
Operating lease liability	10,690		12,670
Research and experimentation costs	6,530		4,130
Tax loss and credit carryforwards	28,880		27,310
Other	(470)		110
Gross deferred tax asset	71,440		65,730
Valuation allowances	(15,960)		(17,180)
Net deferred tax asset	55,480		48,550
Deferred tax liabilities:
Property and equipment	(30,300)		(25,100)
Right of use asset	(10,150)		(12,170)
Goodwill and other intangible assets	(27,580)		(22,050)
Investment in foreign affiliates, including withholding tax	(510)		(770)
Gross deferred tax liability	(68,540)		(60,090)
Net deferred tax liability	$	(13,060)	$	(11,540)

The following is a reconciliation of income tax expense computed at the U.S. federal statutory rate to income tax expense allocated to income before income taxes (dollars in thousands):

	Year ended December 31,
	2023			2022			2021
U.S. federal statutory rate	21		%	21		%	21		%
Tax at U.S. federal statutory rate	$	10,610		$	18,380		$	14,550
State and local taxes, net of federal tax benefit	710			2,790			960
Differences in statutory foreign tax rates	2,980			1,150			(1,690)
Change in recognized tax benefits	(130)			(600)			(550)
Tax credits and incentives	(1,570)			(1,260)			(5,060)
Net change in valuation allowance	(2,700)			340			2,100
Nondeductible compensation	560			990			2,280
Other, net	(230)			(290)			(790)
Income tax expense	$	10,230		$	21,500		$	11,800

The Company has recorded deferred tax assets on $25.4 million of various state operating loss carryforwards and $60.5 million of various foreign operating loss carryforwards. The majority of the state tax loss carryforwards expire between 2026 and 2032 and the majority of the foreign losses have indefinite carryforward periods.

The Company has not made a provision for U.S. or additional foreign withholding taxes related to investments in foreign subsidiaries that are indefinitely reinvested since any excess of the amount for financial reporting over the tax basis in these investments is not significant as of December 31, 2023.

Unrecognized Tax Benefits

The Company had $0.8 million and $1.1 million of unrecognized tax benefits ("UTBs") as of December 31, 2023 and 2022, respectively. If the UTBs were recognized, the impact to the Company's effective tax rate would be to reduce reported income tax expense for the years ended December 31, 2023 and 2022 by $1.0 million and $1.1 million, respectively.

A reconciliation of the change in the UTBs for the years ended December 31, 2023 and 2022 is as follows (dollars in thousands):

	Unrecognized Tax Benefits
Balance at December 31, 2021	$	1,250
Tax positions related to current year:
Additions	140
Tax positions related to prior years:
Additions	—
Reductions	(50)
Settlements	—
Lapses in the statutes of limitations	(230)
Balance at December 31, 2022	$	1,110
Tax positions related to current year:
Additions	140
Tax positions related to prior years:
Additions	—
Reductions	(20)
Settlements	—
Lapses in the statutes of limitations	(400)
Balance at December 31, 2023	$	830

In addition to the UTBs summarized above, the Company has recorded $0.4 million and $0.8 million in potential interest and penalties associated with uncertain tax positions as of December 31, 2023 and 2022, respectively.

The Company is subject to U.S. federal, state and local, and certain non-U.S. income tax examinations for tax years 2016 through 2023. In addition, there are currently several state and foreign income tax examinations in process. The Company does not believe that the results of these examinations will have a significant impact on the Company's tax position or its effective tax rate.

Management monitors changes in tax statutes and regulations and the issuance of judicial decisions to determine the potential impact to UTBs and is not aware of, nor does it anticipate, any subsequent events that could have a significant impact on the Company's financial position during the next twelve months.